I am extremely concerned about the quality of care and staffing implications surrounding the proposed leasing of the remaining portions of Morris View Healthcare Facility by the current Freeholders Board.
Louis C. Hochman reported in an article printed on July 3, 2015 in the New Jersey Advance Media for NJ.com that the Freeholders had commissioned a report to investigate available options after having already outsourcing “housekeeping, laundry, dietary and other services.” That review was conducted by Institutional Property Advisors, a division of Marcus & Millchap. The Operations and Options Analysis was based on October 2015 year-to-date figures. This report identifies three funding streams for Morris View, Medicare, Medicaid and Private Pay patients. If all of the above-named services have already been outsourced, where is the revenue from the leasing of those services reported? According to the report, Morris View is a four-story 283-bed Skilled Nursing facility, constructed in 1973, with an addition completed in 1993. The OPA analysis compared Morris View to five other area nursing homes within a ten mile radius, four of which were constructed around a similar time frame. It appears from the report that Morris View had a higher occupancy rate and higher income per patient than each of the other facilities. The reviewers also noted that at the time of their analysis, Morris County was the sixth wealthiest county in the nation.
Granted, the Freeholders conducted their study based on anticipated changes in the New Jersey state Medicaid funding ratio. Without going into all of the details associated with the changes in New Jersey Managed Medicaid funding formulas created in July 2014 and scheduled to be fully operational in 2017, it is obvious that these changes in regulations will have significant funding applications.
The IPA analysis described four possible solutions, but suggested the establishment of “a Third Party Tenant” leasing situation where the county would retain “complete ownership of the real estate and negotiate a monthly lease from the tenant.” Under this situation, “the profit and losses after the lease payment would accrue to the tenant.” The county would act as a landlord receiving income from the lease, with little or no control over the on-going operations of the facility.
My major concerns with this arrangement are three fold. First, public supported healthcare facilities receive higher reimbursement rates than private care facilities because public facilities tend to take in more acute care patients. The new “managed care option” does provide an exception for nursing home residents already on regular Medicaid, who would continue receiving their benefits outside of the new Managed Care Medicaid system. Second, when a public facility is faced with a funding short fall, public funds are used to breach the gap. When a private facility is faced with this type of shortfall, either the quality of care, or the number of employees would probably be sacrificed. Even though the Freeholder Board is promising that the quality of care would not be compromised under a leasing agreement, that is a promise that would be impossible to keep. Third, the Freeholders have promised the existing nursing and recreational staff that their interests would be protected in any leasing arrangement. The ability to keep this promise is also dubious. While the terms of a lease might require maintenance of existing staffing levels, there is no promise that more expensive close to retirement employees would be maintained. Morris View staff testifying at the June 6th public meeting indicated 18, 20 and 25 years on the job. They discussed family members who are also residents of Morris View. This longevity sense of “family” is uncommon in neighboring private facilities.
The Freeholders also released a report prepared by Geffrey S. Perselay, Esq, on June 22, 2016. Perselay reports that Morris View is the only publicly operated nursing home facility in the county, co-existing with 23 other nursing home facilities. Morris View provides 283 of the 2,847 beds available in the county. The citizens of Morris County paid $7 million during 2015 to bridge the gap between income and expenditures, but the quality of care, and the staffing ratio have apparently remained consistent. The total cost to operate Morris View from 2013 through 2016 rose from $31.5 million to $34.9 million or a 2.7% per year increase. According to Perselay, the projected increase over the next five years would be roughly 3.4% per year.
Perselay met with the direct care and recreation staff in April to discuss possible ways to increase revenue. At this time he discovered that there were 58 vacant rooms with a potential of 116 beds of a vacant third floor. The beds on the third floor had apparently been deactivated in June 2008 and the licenses for the 156 beds were transferred to the Morris County Improvement Authority and sold to another nursing home provider.
All of the alternative uses discussed during that April 2016 meeting were of a medical nature and would have required considerable renovations to the building and the addition of state licenses and separate entrances. Any contemporary usage of these rooms will also necessitate renovation, but a bond issue could be floated, or a fund raising campaign organized to cover those expenses.
Before the Freeholders entertain leasing of the facility, I would suggest that several other funding streams be entertained, including the use of the vacant third floor for educational purposes, perhaps to train potential new health care professionals. It does not appear that any conversations were entertained between Perselay Associates and Morris County Community College or the Vocational Technical School. It also does not appear that the development of any type of specialized endowment fund has ever been considered.
While funding is definitely a concern, the quality of care, and the safe haven that Morris View has provided the citizens of Morris County over the past 40 years are also important considerations. We do not require that our police, fire, library, public parks, schools and maintenance services cover all of their own expenses. Why should of the county nursing facility be held to a different standard. In the sixth wealthiest county in the nation, funding opportunities should be available to care for our frailest and most sensitive citizens. Before a decision is made to issue an RFP with the goal of leasing Morris View to a private contractor, I would sincerely encourage the Freeholders to investigate the possibility of other, not medical options that would ensure the residents and employees of Morris View an opportunity to continue the “family atmosphere” they value and cherish. We owe due diligence and respectful care to those who have served our communities and raised our children.
Dr. Rozella G. Clyde
Chatham Borough, NJ
Dr. Rozella G. Clyde is Educational Director of Clydeoscope Educational Consultants, LLC, and holds a PhD in Instructional Design for Online Learning and a Masters in School District Administration. She is also a candidate for Morris County Freeholder on the Democratic ticket in November.